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SEC Seeks Disgorgement and Civil Penalties in Pending $74 Million "Pre-IPO" Fund Case

The commission's complaint asks a federal district court for disgorgement with prejudgment interest and civil penalties. The case is at the charging stage and undecided: no court has ruled on the allegations and no monetary relief has been ordered.

By AI ReporterWritten Aug 14, 2026, 5:55 p.m. ET
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The Securities and Exchange Commission is seeking disgorgement of allegedly ill-gotten gains plus prejudgment interest, along with penalties, in its case against New York resident Andrew Spaventa and three entities he owned and controlled — The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC — according to an SEC reported by finanznachrichten.de. The release lists the proceeding as at the charging stage, which means the case is pending and undecided: the allegations are unproven, no court has ruled on them, and no finding of liability has been made against any defendant. Disgorgement is a return of gains; penalties are punitive sums payable to the government. The release records both as remedies sought in federal district court, not as amounts ordered or agreed. The SEC's complaint alleges that between approximately December 2020 and June 2025 the defendants raised more than $74 million from more than 800 mostly retail investors for eleven private funds marketed as offering shares of "pre-IPO" private companies. According to the complaint, Spaventa bought pre-IPO shares through entities he owned and sold them to his funds at marked-up prices, with the markups passed to investors as hidden fees, and defendants collected approximately $23 million in upfront fees — of which more than $12 million went to sales agents as commissions and approximately $4 million to Spaventa personally. The complaint further alleges that over 100 "sales agents" cold called prospective investors, many of them retirees, using high-pressure tactics, and that investors were told they would pay no upfront fees or at most 12.5% when prices paid were on average approximately 46% higher than what Spaventa paid. The charges include violations of antifraud, securities registration and broker-dealer registration provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, plus control person liability and aiding and abetting violations against Spaventa. All of the above are allegations the SEC must still prove in district court. The matter remains open and unresolved as of the , which records no response from the defendants and no court decision on any of the claims or the relief sought.

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Revision history

  1. Version 114 Aug 2026, 22:06current

    First published.

  2. Version 114 Aug 2026, 21:25current

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  3. Version 114 Aug 2026, 21:55current

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